Legal concerns raised over I-485 financing plan
Posted November 30, 2009
Updated December 1, 2009
Raleigh, N.C. — The plan to finish the 5-mile remainder of Charlotte's Interstate 485 outer loop with a public-private partnership prompted concerns among state treasury officials, according to e-mails released Monday.
Gov. Beverly Perdue announced Nov. 9 in Charlotte the proposal which calls for contractors to design and finance part of the $540 million project and later be reimbursed by the state.
In an Oct. 13 e-mail, Deputy Treasurer Vance Holloman called the proposed financing method a "wild" plan.
In another e-mail, sent Nov. 4 to State Treasurer Janet Cowell, Holloman wrote that the “DOT’s idea of paying interest and principal over 10 years is not permitted” by the state’s general statutes.
Numerous other e-mails by treasury officials detail legal concerns over the unusual financing agreement. Holloman also attempted to set up a meeting with Mark Foster, chief financial officer for the state Department of Transportation, the Friday before Perdue's announcement to talk about the issues.
The meeting was not possible but Ted Vaden, deputy secretary for DOT communications, said Monday that the agency was aware of the concerns. Vaden said the state Attorney General's Office had assured the agency that the plan, which would save the state $50 million to $100 million, was legal.
“We examined the options closely. We got advice from the Attorney General's Office. We consulted with the Treasurer’s Office. Yes, we did and still do want to take advantage of a favorable construction environment by accelerating this project,” Vaden told WRAL News.
The plan calls for about $50 million in private financing to go toward finishing I-485 and building an interchange between I-485 with Interstate 85. The state would pay back the funding in 10 years.
The rest of the of project, which also includes widening part of Interstate 85 in Cabarrus County, would be funded with $265 million from the North Carolina Highway Trust Fund and $250 million from federal loans.
Perdue said Monday that she is in support of the plan, and that the public-private funding model is a way to get projects completed during a down economy.
"We want you to have a reason to bring it in under budget, and done well, and done so as to last for the next 50 years," Perdue said. "The only way I think you can do that, without raising the gas tax, which I’m not going to do ever, is that you have got to have a different financing structure."
Construction could begin by mid-2010 and be complete by 2015.
The 65-mile I-485 is one of several traffic loops planned in the state to help ease congestion in urban areas. Interstate 295, for example, is also under construction in Fayetteville, and Interstate 840 is under construction in Greensboro.